United States v. Algernon Blair, Inc.

United States Court of Appeals, Fourth Circuit, 1973.

479 F.2d 638.

Dawson, pp. 103-105


Facts: A subcontractor, Coastal, starting doing work for a primary contractor, Blair.  Blair refused to make certain payments and Coastal stopped work.  The subcontractor brought suit against the primary contractor to recover for the services rendered.


Issue: Can a subcontractor recover damages for services rendered when the primary contractor breaches a contract even if the subcontractor would have lost money if they had completed the contract?


Rule: If expectation damages are insufficient to cover the plaintiff’s losses, the plaintiff may substitute reliance damages.


Analysis: Coastal is entitled to damages for services rendered because Blair has benefited from Coastal’s loss.  The damages should be measured by the replacement value of the labor and equipment provided by Coastal.


Conclusion: The case was reversed and remanded to find out how much the services that Coastal rendered were worth.


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